Michael van de Poppe: bitcoin is facing a Flash Crash scenario

Michael van de Poppe, CEO of MN Consultancy, warned of a high probability of a «Flash Crash» scenario. This scenario implies a sharp drop in the value of cryptocurrencies followed by a rapid recovery. This statement is caused by the rapid growth of the bitcoin price to almost $ 100,000.

According to the expert, the market has shown classic signs of overheating, namely an increase in margin positions and an increase in asset volatility.

Historical data shows that significant corrections become more likely in such conditions.

Van de Poppe noted that a sharp drop of at least 10% in the bitcoin exchange rate could lead to a 20−40% collapse in altcoin prices.

The analyst also drew attention to the risks for companies such as MicroStrategy, which is the largest publicly traded bitcoin holder.

In the event of a significant drop in the asset price, the company may suffer significant losses during a prolonged bear market.

The expert advises preparing for a possible correction and avoiding panic in case of a drop in bitcoin value. In his opinion, now is the right time to reassess risks and choose a strategy in the face of high market volatility.